Page 1of 13McMaster University Department of EconomicsECON 1B03 Midterm Test #1 VERSION 4 Instructor: Professor H Holmes Duration: 2 hours Total Number of Pages: 14 INSTRUCTIONS: Answer all questions on the scan sheets. USE AN HB PENCIL ONLY. Make sure you carefully fill in the bubbles. YOU MUST FILL IN YOUR STUDENT NUMBER, VERSION NUMBER AND SECTION NUMBER ON THE SCAN SHEET OR YOUR GRADE WILL NOT BE RECORDED. You may use the Casio FX calculator. Hand in the scan sheet and this test copy. TOTAL MARKS AVAILABLE: 50 NAME:____________________________________________________ STUDENT #: _______________________________________________ MUGSI ID: ________________________________________________ SECTION: Circle One: 9:30-10:20 11:30-12:20 Wednesday Night

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Page 2of 13Multiple ChoiceIdentify the letter of the choice that best completes the statement or answers the question.____ 1. Economists consider normative statements to be a. descriptive, making a claim about how the world is. b. statements about the normal condition of the world. c. prescriptive, making a claim about how the world ought to be. d. statements which establish production goals for the economy. ____ 2. Which of the following is an example of a positive statement? ____ 3. The production possibilities frontier is a Figure 1 ____ 4. Refer to Figure 1. Which point or points are efficient?

Page 3of 13Figure 2 ____ 5. Refer to Figure 2. The opportunity cost in terms of toothbrushes of getting 10 additional toasters by moving from point B to point A is a. 20 toothbrushes. b. 10 toothbrushes. c. 5 toothbrushes. d. zero, since the economy has the additional resources to produce 10 additional toasters. Figure 3 ____ 6. Refer to Figure 3.. If this economy moved from point C to point E,

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